Travel notes: Chiang Mai
Meeting Marc Faber, a FinTwit contact and thoughts on Thai consumer brands. Estimated reading time: 8 minutes
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I just spent a few days in the Northern Thai City of Chiang Mai.
While technically on holiday, I also took the opportunity to learn more about some of the companies I’ve discussed on Asian Century Stocks. I also met with two investors, including Marc Faber, who has lived in Chiang Mai since the early 2000s.
Chiang Mai is Thailand’s second-largest city, with a population of 1.8 million. Compared to Bangkok, it’s less busy and less touristy. We found people around us to be friendly and welcoming.
What I did not understand prior to this trip is that Northern Thailand is culturally distinct from the South. As you can tell from the following chart, Chiang Mai and surrounding areas were historically part of the Lanna Kingdom, with its own language and writing system.
In 1774, Thailand helped free Chiang Mai from its then-Burmese captor. And eventually became integrated into the Thai nation. But had history turned out differently, Lanna might have remained a separate kingdom.
For a region that’s at the crossroads between China, Burma, Laos and central Thailand, it’s surprising how little trade takes place in Chiang Mai. It seems to be a centre for agricultural trade. But not much beyond that. None of Thailand’s largest companies are based in Chiang Mai.
It is a major tourist destination, though. Visitors worldwide come to Chiang Mai to visit temples, eat Northern Thai cuisine, and try the many nearby hiking trails.
My girlfriend and I were shocked at the lack of tourists. Our local guide explained that after the initial bout of revenge spending after COVID-19, tourists had been few and far between.
While Thailand’s tourist arrivals are just ~1/4 below the pre-COVID levels, the Chinese have been mostly absent due to flight capacity and visa issues. We hardly saw any mainland Chinese at the boutique hotel we stayed at. Hopefully, this will change now that Thailand has finally removed the visa requirement for Chinese nationals.
I was curious to see how much of an inroad Chinese automakers had made in Thailand, given the success they’d had in countries like Spain and Mexico. However, the vast majority of the existing stock of vehicles were still Japanese petrol cars or hybrids.
Shanghai Auto’s “MG” brand was by far the most common among the Chinese brands. Occasionally, we saw electric vehicles from BYD (1211 HK - US$92 billion) and Great Wall’s Ora brand (2333 HK - US$24 billion). A BYD Seal sedan with a ~500km range (pictured above) costs around THB 1.4 million, equivalent to roughly US$38,000. I understand there is an EV subsidy, but it’s modest at just THB 150,000.
One of the evenings, we visited the Central Festival Chiang Mai shopping mall, just a few minutes away from Chiang Mai’s old town. It’s owned by property developer Central Pattana (CPN TB - US$7.8 billion), a subsidiary of Thailand’s Central Group. It was an impressive mall － up there with the best shopping malls I’ve seen in Singapore or Hong Kong.
Across the road from Central Festival Chiang Mai, we spotted a high-rise development built by Thai family-owned developer Supalai (SPALI TB - US$1.1 billion). This condo is called Supalai Monte II and has decent Google Reviews scores.
On Central Mall’s 5th floor, we found a large cinema run by Major Cineplex (MAJOR TB - US$335 million). I was impressed. The lobby was tastefully furnished, and the e-ticket machines worked beautifully. It was better than any cinema I’ve been to in Singapore. We got 2x tickets to Agatha Christie's classic The Haunting in Venice for THB 160 each (around US$4.3).
But the cinema was also surprisingly empty. No queues in the cinema lobby and few people around. I counted 20 individuals in the movie theatre out of roughly 200 seats. And this was for an 8:00 p.m. screening.
Another surprise was that it took 25 minutes of advertising before the movie started. Major Cineplex is clearly milking its captive audiences as much as possible.
Before the movie started, there was also a 2-3 minute tribute to the Thai King. In the past, Thais have always stood up during this ceremony. But this time, we only saw a handful of people stand up.
Visiting Marc Faber
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